grandfather clause

provision included in a new rule that exempts from the rule a person or business already engaged in the activity coming under regulation.

Dictionary of Finance and Investment Terms for: grandfather clause

grandfather clause

provision included in a new rule that exempts from the rule a person or business already engaged in the activity coming under regulation. For example, the Financial Accounting Standards Board might adopt a rule effective in 1998 relating, say, to depreciation that, under a grandfather clause, would exempt assets put in service before 1998.

Dictionary of Real Estate Terms for: grandfather clause

grandfather clause

when a law is changed or a new law is passed, those whose specific activity was legal under the previous law are often allowed to continue, by virtue of this provision.

Example: All real estate brokers are allowed to continue to practice as brokers after licensure requirements increase. The new law affects only new licensees; old licensees are grandfathered.

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